[Frontier Communications to acquire 4.8 million access lines from Verizon creating the largest 'pure' rural communications service provider.]

Stamford, CT -- Frontier Communications Corporation announced that it has signed a definitive agreement with Verizon Communications Inc. under which Frontier will acquire approximately 4.8 million access lines from Verizon. The all stock transaction is valued at approximately $8.6 billion. The transaction will create the largest pure rural communications services provider and the nation’s fifth largest incumbent local exchange carrier (ILEC) with more than 7 million access lines, 8.6 million voice and broadband connections and 16,000 employees in 27 states. Frontier will offer broadband, new bundled services and expanded technologies to customers across its expanded geographic footprint.

Under the terms of the agreement, Verizon will establish a separate newly formed entity (“SpinCo”) for its local exchanges and related business assets in 14 states. SpinCo will be spun off to Verizon’s shareholders and simultaneously merged with and into Frontier. The transaction has been approved by the Boards of Directors of Frontier and Verizon, and is expected to be completed within approximately 12 months.

The transaction is extremely compelling for all stakeholders of Frontier. It will provide Frontier with enhanced scale and scope, improved positioning, a strong balance sheet, and greater cash flow generation capabilities. For the fiscal year ended 2008, the combined company would have had on a pro forma basis revenue in excess of $6.5 billion, EBITDA of approximately $3.1 billion, free cash flow of approximately $1.4 billion and would have had leverage of 2.6 times EBITDA at December 31, 2008.

Maggie Wilderotter, Frontier Communications Chairman and Chief Executive Officer, said, “This is a truly transformational transaction for Frontier. With more than 7 million access lines in 27 states, we will be the largest pure rural communications provider of voice, broadband and video services in the U.S. Frontier is committed to providing our customers with state-of-the-art technology and innovative products. We are confident that we can dramatically accelerate the penetration of broadband in these new markets during the first 18 months. We know that broadband is a catalyst for a healthy local economy and job growth.”

“We have a track record of successfully integrating new operations and know that a seamless transition benefits customers and employees. Frontier and Verizon have gone to great lengths to ensure that the transaction will be well-executed. We will focus on execution, as well as on improving operations, delivering new products and services and achieving synergy targets. This transaction makes us a larger and an even stronger company, with significantly greater free cash flow generation capability. This acquisition will benefit the communities we serve, increase opportunities for employees and allow us to continue to deliver world-class profit margins and revenue growth for shareholders,” continued Ms. Wilderotter.

Ivan Seidenberg, Chairman and Chief Executive Officer of Verizon, said, “This transaction is part of our multi-year effort to transform our growth profile and asset base to focus on wireless, broadband, and global IP. At the same time, it’s an attractive way to unleash untapped value for our shareholders. Frontier knows how to run wireline communications services well and has a top-notch management team to take these properties to the next level. I am confident the company will provide the employees in these states with opportunities as it focuses on growth and an expanded portfolio of products in those markets.”

Benefits of the Transaction

* Significant Revenue Opportunities: The transaction will create a company with greater scale and scope. Frontier expects to achieve customer revenue growth through improved broadband penetration, bundled service packages to residential and small businesses, expanded long distance and feature products, improved customer retention, and new product offerings.

* Substantial Synergies: Frontier expects to achieve cost synergies of approximately $500 million annually, representing 21% of 2008 SpinCo cash operating expenses. These cost savings are expected to come from leveraging Frontier’s existing network and IT infrastructure and its corporate administrative functions.

* New Dividend Policy: After the close of the transaction, the company will pay an annual dividend of $0.75 per share to its shareholders, representing an attractive and sustainable payout ratio. Based on Frontier’s $7.57 closing stock price on May 12, 2009, this dividend represents an annual yield of approximately 9.9% to Frontier shareholders. This dividend policy will allow the company to invest in the acquired markets, offer new products and services, and extend and increase broadband capability to those markets over the next few years.

* Strong Financial Profile: Upon close of the transaction, Frontier will have significantly enhanced financial flexibility with decreased leverage of 2.6 times combined 2008 pro forma EBITDA, a very sustainable dividend payout, and a commitment to achieve an investment grade credit rating. The transaction is anticipated to be free cash flow accretive in the second full year of operation, growing to double-digit accretion in the third year and beyond.

* Strong Platform for Continued Growth: Frontier will generate approximately $1.4 billion of combined pro forma 2008 free cash flow and be positioned for future investments in new products, technologies and acquisitions.

Details of the Transaction

Verizon will establish a separate entity (SpinCo), which will hold the local exchange and related business assets in the 14 states that are the subject of the transaction. SpinCo will carry approximately $3.333 billion of debt consisting of a combination of newly issued debt as well as assumed debt already issued by entities that are being contributed to SpinCo. Verizon will receive approximately $3.333 billion of cash or debt relief. Verizon will then spin off SpinCo pro rata to its shareholders and SpinCo will immediately merge with and into Frontier. Verizon’s shareholders will receive shares of Frontier common stock in connection with the merger in an amount to be determined at closing, which is expected to have a value of approximately $5.25 billion.

The exact number of shares to be issued by Frontier will be determined based on Frontier’s 30-day weighted average closing share price ending 3 trading days prior to closing, subject to a collar such that in no case will the Frontier common stock price, for the purpose of determining the number of shares of Frontier common stock to be issued to Verizon shareholders at closing, be lower than $7.00 or higher than $8.50. Depending on the trading prices of Frontier shares just prior to the closing, upon the closing of the transaction, Verizon shareholders will own between approximately 66 and 71 percent of the new company, and Frontier shareholders will own between approximately 29 and 34 percent. Verizon will not own any shares in Frontier after the merger. Both the spin-off and merger are expected to qualify as tax-free transactions, except to the extent that cash is paid to Verizon shareholders in lieu of fractional shares.

Frontier will acquire Verizon access lines in Arizona, California, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, Wisconsin and West Virginia. Frontier currently provides phone, video, Internet and broadband services to more than 2 million customers in 24 states, including 11 of the states that are part of the agreement announced today. The Verizon properties include approximately 4.8 million access lines, with 1.0 million High-Speed Internet customers, 2.2 million long-distance customers, 164,000 DirecTV customers and 69,000 FiOS video customers.

Leadership, Approvals and Timing

The combined business will be managed by Frontier’s existing executive team, led by Maggie Wilderotter. The company’s headquarters will be in Stamford, Connecticut.

The transaction is subject to approval by Frontier shareholders and the satisfaction of customary closing conditions and regulatory approvals, and the obtaining of financing by SpinCo. The transaction is expected to be completed within approximately 12 months.